By Graham MacInnis
WINDSOR, Ont. — Ottawa and Queen’s Park on Friday committed up to $235.5 million to three southwestern and northern Ontario markets in exchange for deep cuts to the development charges municipalities levy on new homes, the latest awards in a program that is reshaping how Ontario pays for growth just across the border from Western New York.
The City of Windsor and the Town of Tecumseh will receive up to $84.4 million, municipalities in Essex County up to $105.8 million, and the City of Greater Sudbury up to $45.3 million through the Canada-Ontario Development Charge Reduction Program, according to releases from Ontario and Housing, Infrastructure and Communities Canada. All figures are in Canadian dollars.
The deals
Windsor will get up to $77.6 million for cutting development charges 70% on all housing types from March 30, 2026, to March 31, 2029. The money will go to stormwater management and road projects, including widening and extending key corridors. The province estimates the cut will lower the cost of building a new home in Windsor by up to $49,452.
“This significant transformational investment of $77.6 million from the governments of Ontario and Canada allows us to reduce development charges by 70 percent for the next three years, with direct and significant savings for those developers building and those families looking to create a home in Windsor,” Mayor Drew Dilkens said. He said the projects “will unlock the potential for thousands of housing units, help create vital infrastructure needed for our regional hospital, and more.”
Tecumseh will get up to $6.8 million for a 50% cut over the same period, funding a trunk sanitary sewer. Mayor Gary McNamara said it “will support the building of over 700 more homes in the Tecumseh Hamlet Secondary Plan Area.” The two governments say the Windsor and Tecumseh cuts and infrastructure would unlock 19,263 new homes.
In Essex County, the county itself will get up to $51.2 million for eliminating development charges in 2026 and 2027 and phasing them back in, with cuts of 75% in 2028, 50% in 2029 and 25% in 2030. LaSalle will get up to $25.4 million for eliminating its charges through March 31, 2029, and Essex, Lakeshore and Kingsville will get $8.8 million, $11.8 million and $8.4 million for 50% cuts. The governments estimate the Essex County cuts at up to $40,862 per home and say they would unlock 36,372 homes.
Greater Sudbury is eliminating residential development charges for three years. Its $45.3 million will move the Garson East drinking water system to surface water and upgrade water and sewer lines in the Maley Drive growth corridor. The city estimates 3,320 homes would be unlocked.
“Building more homes requires strong partnerships and investments that make it easier and more affordable to build,” said Jennifer McKelvie, parliamentary secretary to the federal minister of housing and infrastructure.
“Ontario is growing, and we need to ensure our communities have the housing and infrastructure to keep pace,” said Rob Flack, Ontario’s minister of municipal affairs and housing.
Builders welcomed the awards. “Reducing development charges is about making it possible to get more homes built, at prices more families can afford,” said Scott Andison, chief executive of the Ontario Home Builders’ Association.
How the program works
In March 2026, Canada and Ontario agreed to a cost-matched $8.8 billion over 10 years for Ontario infrastructure, with the federal share flowing through the Build Communities Strong Fund. Funding is prioritized for municipalities that cut development charges on all residential types by 30% to 50% or more and keep the cuts for at least three years. Municipalities must cover at least 10% of project costs, and all awards remain subject to signed agreements and due diligence. Of Ontario’s 444 municipalities, more than 200 levy development charges.
The two governments are also waiving the full HST on eligible new homes from April 1, 2026, to March 31, 2027, worth up to $130,000 per home. Combined, Ontario says, a Windsor buyer could save up to $179,452.
The largest award so far went to Hamilton, which in August was promised up to $572 million for eliminating development charges.
What about Niagara?
Niagara is the region Western New Yorkers know best. According to a Niagara Region staff report on its applications, the region applied in June for program money for Phase 1 of the South Niagara wastewater treatment project and for water and wastewater work in West Lincoln, committing to a 50% cut in regional residential development charges from March 30, 2026, to March 31, 2029, if approved. The Buffalo Chronicle found no announcement of an award to Niagara Region as of Friday.
Why it matters in Buffalo
The Ontario approach is a direct public subsidy to the cost of new construction, paid to municipalities on condition they charge builders less. New York municipalities do not use Ontario-style development charges, but the question it answers, who pays for the pipes and roads that new subdivisions need, is the same one facing towns in Erie and Niagara counties.
The cuts also come as Canadian prices fall. Home prices in Canada have fallen 20% and thousands of unsold condominiums sit empty, Bloomberg reported in a story republished by Canadian Mortgage Trends. Canada’s ban on foreign purchases of residential property, which covers most non-Canadian buyers, is set to expire Jan. 1, 2027, and Finance Minister François-Philippe Champagne told reporters Ottawa is “looking at all the options that we have in front of us, considering where the market is going.”
“We don’t work in the cycle. We know that the country is going to need more housing,” Ana Bailão, chief executive of the federal agency Build Canada Homes, told Bloomberg.
The Buffalo Chronicle has asked Housing, Infrastructure and Communities Canada and Ontario’s housing ministry whether Niagara Region’s applications are still under review.
Featured image: Downtown Hamilton, Ont., the program’s largest recipient so far. Photo by Rick Cordeiro (Nhl4hamilton), released into the public domain, via Wikimedia Commons.
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